A Quick Look At Goldman's Takeover Of The US Judicial System: NY Fed Edition

Moments ago, in the aftermath of the latest scandal involving Goldman's Rohit Bansal getting material information from a NY Fed employee, finally admitted that the original Carmen Segarra "whistleblower" allegations, namely that there was a material weakness (as in it is non-existent) when it comes to the NY Fed's supervision of TBTF banks, by which we mean Goldman Sachs here, were founded and valid when at 4pm on the dot the NY Fed released this:

The Federal Reserve Board on Thursday announced two separate reviews that are underway at the Federal Reserve System to ensure that the examinations of large banking organizations are consistent, sound, and supported by all relevant information.

At the request of the Board, its Inspector General is examining two aspects of the Federal Reserve System's examination program for large banking organizations:

  • Whether there are adequate methods for decision-makers at the relevant Reserve Banks and at the Board to obtain all necessary information to make supervisory assessments and determinations;
  • And whether channels exist for decision-makers to be aware of divergent views among an examination team regarding material issues.

Additionally, the Board is conducting its own review of the supervision of the largest, most systemically important financial institutions in the United States. This review will focus on:

  • Whether the decision-makers at the Board receive the information needed to ensure consistent and sound supervisory decisions regarding the supervision of the largest, most complex banking organizations;
  • And whether adequate methods are in place for those decision-makers to be aware of material matters that required reconciliation of divergent views related to supervision of those firms.

Attachment (PDF)

Which is great news for Carmen Segarra, and we are very happy to see that over a year after her original allegations of Goldman takeover at the most important central bank branch, they have been proven right and the Inspector General wil have to take a few million in bribes from Goldman to find there is absolutely nothing wrong at the New York Federal Reserve Bank of Goldman Sachs.

Still, we have to point out a small but shocking footnote.

Recall what happened this spring when Segarra's whistleblower suit was still warm in the corridors of the US "justice" system:

U.S. District Judge Ronnie Abrams in Manhattan ruled that the failure by the former examiner, Carmen Segarra, to connect her disclosure of Goldman's alleged violations to her May 2012 firing was "fatal" to her whistleblower lawsuit. Abrams also said Segarra could not file an amended lawsuit.

 

"Congress sought to protect employees of banking agencies ... who adequately allege that they have suffered retaliation for providing information regarding a possible violation of a 'law or regulation,'" the judge wrote. "Plaintiff has not done so." Segarra's findings that Goldman's conflict-of-interest practices may have violated merely an "advisory letter" that did not carry the force of law did not entitle her to whistleblower protection under the Federal Deposit Insurance Act, Abrams said.

And then this shocker: the judge on the case was conflicted, and had a close relationship to Goldman which was represented by her husband also a lawyer, clearly was "irrelevant":

In her ruling on Wednesday, Abrams also rejected a move by Stengle for greater disclosure by the judge about her husband's relationship with Goldman Sachs. Abrams disclosed on April 3 that she had just learned that her husband, Greg Andres, a partner at Davis Polk & Wardwell, was representing Goldman in an advisory capacity.

 

Stengle said at the time she would not seek Abrams' recusal, the judge said, and went ahead the next day with scheduled oral arguments on the defendants' bid to dismiss the case.

 

But on April 11, Stengle made a written request for a "more complete disclosure" of Andres' relationship with Goldman, and Abrams' own working relationship with another defense lawyer.

 

Abrams said that was too late, given that Segarra by then would have had a chance to "sample the temper of the court" and perhaps anticipate she would lose unless Abrams recused herself. "The timing of plaintiff's requests suggests that she is engaging in precisely the type of 'judge-shopping' the 2nd Circuit has cautioned against," Abrams wrote, referring to the federal appeals court in New York. "Such an attempt to engage in judicial game-playing strikes at the core of our legal system."

A legal system which precluded the plaintiff's right to a fair ruling, one which the NY Fed just did on her behalf, because clearly the "judge" on the case was a person who was conflicted in her bias and her allegiance to a firm that was paying her husband's bills.

Who is Judge Ronnie Abrams:

In 2008, Abrams returned to Davis Polk as Special Counsel for Pro Bono. She had previously worked at the firm from 1994 to 1998. While at Davis Polk, Ms. Abrams served as Counsel to the New York State Justice Task Force, a task force created by New York State Chief Judge Jonathan Lippman to examine the causes of wrongful convictions and make recommendations for changes to safeguard against such convictions in the future.

Clearly the last thing she wanted is for someone to "wrongfully convict" the Ny Fed. And just whom do we have to thank for Judge Ronnie Abrams?

Senator Kirsten Gillibrand recommended Abrams to fill a judicial vacancy on the United States District Court for the Southern District of New York. On July 28, 2011, President Barack Obama formally nominated Abrams to the Southern District of New York. She replaced Judge Lewis A. Kaplan who took senior status in 2011. The Senate Judiciary Committee held a hearing on her nomination on October 4, 2011 and reported her nomination to the floor on November 3, 2011.

Who are Kristen Gillibrand's biggest campaign donors?

So Davis Polk (where Abrams worked) at #2, and Goldman (which certainly wanted to avoid discovery in the Segarra lawsuit) at #4?

One really just can't make this up. Perhaps the Fed inspector general, when he is done "fixing" the corruption at the NY Fed will be so kind to take a look at the Goldman takeover of the US judicial system next.

One also has to either laugh or weep when reading this, because the above once again confirms what we said a year ago when we said that "the judicial branch is also under the control of the two abovementioned entities", namely the NY Fed and Goldman.

And the saddest thing: it cost the banks (and their lawyer lackeys) under a million to buy America's judicial system off: American justice is not only for sale, it goes at firesale prices!

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